Normalized FFO Per Share for the Fourth
Quarter Increases by 11.5% to $0.58 Compared to Last Year
Rental Rates for New and Renewal Leases
Increase by 7.5%
Same Property Cash Basis NOI Increases by
2.0% Year Over Year while Occupancy Remains Stable at 94.9% at Year
End
Government Properties Income Trust (NYSE: GOV)
today announced its financial results for the quarter and year
ended December 31, 2014.
GOV President and Chief Operating Officer David Blackman made
the following statement:
“I am pleased with our business performance in the fourth
quarter. In addition to growing our Normalized FFO per share by
11.5%, we have maintained stable occupancy, increased rental rates
on new and renewal leases as well as grown same property Cash Basis
NOI. We also took advantage of today’s favorable capital markets by
securing a new revolving credit facility and term loans at
favorable terms.”
Results for the Quarter Ended December 31, 2014:
Normalized funds from operations, or Normalized FFO, for the
quarter ended December 31, 2014 were $40.7 million, or $0.58 per
basic and diluted share, compared to Normalized FFO for the quarter
ended December 31, 2013 of $28.2 million, or $0.52 per basic and
diluted share. The increase in Normalized FFO per share this
quarter was primarily the result of GOV’s property acquisitions and
its July 2014 investment in Select Income REIT (NYSE: SIR).
Net income was $14.1 million, or $0.20 per basic and diluted
share, for the quarter ended December 31, 2014 compared to $12.7
million, or $0.23 per basic and diluted share, for the quarter
ended December 31, 2013. The weighted average number of basic and
diluted common shares outstanding was 70.3 million for the quarter
ended December 31, 2014, and 54.6 million and 54.7 million,
respectively, for the quarter ended December 31, 2013.
Reconciliations of funds from operations, or FFO, Normalized FFO
and net operating income, or NOI, to net income determined in
accordance with U.S. generally accepted accounting principles, or
GAAP, for the quarters ended December 31, 2014 and 2013 appear
later in this press release.
Results for the Year Ended December 31, 2014:
Normalized FFO for the year ended December 31, 2014 were $140.8
million, or $2.30 and $2.29 per basic and diluted share,
respectively, compared to Normalized FFO for the year ended
December 31, 2013 of $115.8 million, or $2.12 per basic and diluted
share.
Net income was $56.5 million, or $0.92 per basic and diluted
share, for the year ended December 31, 2014, compared to $54.6
million, or $1.00 per basic and diluted share, for the year ended
December 31, 2013. The weighted average number of basic and diluted
common shares outstanding was 61.3 million and 61.4 million,
respectively, for the year ended December 31, 2014 and 54.6 million
and 54.7 million, respectively, for the year ended December 31,
2013.
Reconciliations of FFO, Normalized FFO and NOI to net income
determined in accordance with GAAP, for the years ended December
31, 2014 and 2013 appear later in this press release.
Leasing, Occupancy and Same Property Results:
GOV entered into new and renewal leases for 163,906 rentable
square feet with government tenants during the quarter ended
December 31, 2014 which had weighted (by rentable square feet)
average rental rates that were 7.8% above prior rents for the same
space. The weighted (by rentable square feet) average lease term
for these leases was 5.6 years. GOV also entered into new and
renewal leases for 33,962 rentable square feet with non-government
tenants during the quarter ended December 31, 2014, which had
weighted (by rentable square feet) average rental rates that were
5.8% above prior rents for the same space or, in the case of space
acquired vacant, market rental rates for similar space in the
building at the date of acquisition. The weighted (by rentable
square feet) average lease term for leases to non-government
tenants was 4.5 years. In aggregate, GOV entered into new and
renewal leases for 197,868 rentable square feet at a 7.5% rollup in
rent. Leasing capital commitments for new and renewal leases
entered into during the quarter ended December 31, 2014 were $3.4
million, or $3.13 per square foot per lease year.
As of December 31, 2014, 94.9% of GOV’s rentable square feet at
properties in continuing operations was leased. This compares with
94.8% as of December 31, 2013 and 95.4% as of September 30,
2014.
Occupancy for properties owned continuously since October 1,
2013 (or same property) decreased to 94.5% as of December 31, 2014,
from 94.6% as of December 31, 2013. Same property NOI increased
2.2% for the quarter ended December 31, 2014 compared to the same
period in 2013.
Recent Property Investment and Sales Activities:
As previously disclosed, in August 2014, a U.S. Government
tenant notified GOV that it intended to exercise its option,
pursuant to its lease, to acquire the office property it leased
from GOV located in Riverdale, MD with 337,500 rentable square feet
and a net book value of $30.4 million at December 31, 2014. The
sale of this property was completed in February 2015 and the sale
price was $30.6 million, excluding closing costs.
As previously disclosed, in April 2014, GOV entered into an
agreement to sell an office property located in Falls Church, VA
with 164,746 rentable square feet and a net book value of $12.3
million at December 31, 2014. The contract sales price is $16.5
million, excluding closing costs. The closing of this sale is
subject to certain conditions, including the purchaser obtaining
certain zoning entitlements, and is currently expected to occur
before year end 2015.
Recent Financing Activities:
As previously disclosed, in November 2014, GOV replaced its
existing unsecured revolving credit and term loan facilities that
provide GOV with up to $1.3 billion in aggregate
borrowing with extended maturities and at lower interest rates, as
follows:
- GOV replaced its existing $550
million unsecured revolving credit facility with a maturity
date of October 19, 2015 and interest payable on
borrowings of LIBOR plus 150 basis points with a new $750
million unsecured revolving credit facility maturing
on January 31, 2019 with interest payable on borrowings
at LIBOR plus 125 basis points based on GOV's current credit
ratings. The new revolving credit facility includes a borrower's
option to extend the maturity date for one year to January 31,
2020 upon payment of a fee and meeting certain other
conditions.
- GOV also replaced its
existing $350 million unsecured term loan facility with a
maturity date of January 11, 2017 and interest payable on
the amount outstanding at LIBOR plus 175 basis points with:
- A new $300 million unsecured
term loan maturing on March 31, 2020 with interest paid
on the amount outstanding at LIBOR plus 140 basis points based on
GOV's current credit rating; and
- A new $250 million unsecured
term loan maturing on March 31, 2022 with interest paid
on the amount outstanding at LIBOR plus 180 basis points based on
GOV's current credit ratings.
Conference Call:
On Friday, February 20, 2015, at 1:00 p.m. Eastern Time,
President and Chief Operating Officer, David Blackman, and
Treasurer and Chief Financial Officer, Mark Kleifges, will host a
conference call to discuss GOV’s 2014 fourth quarter and year end
results.
The conference call telephone number is (800) 230-1085.
Participants calling from outside the United States and Canada
should dial (612) 234-9959. No pass code is necessary to access the
call from either number. Participants should dial in about 15
minutes prior to the scheduled start of the call. A replay of the
conference call will be available through 11:59 p.m. Eastern Time
on Friday, February 27, 2015. To hear the replay, dial (320)
365-3844. The replay pass code is 352025. A live audio webcast of
the conference call will also be available in a listen only mode on
GOV’s website, at www.govreit.com. Participants wanting to access
the webcast should visit GOV’s website about five minutes before
the call. The archived webcast will be available for replay on
GOV’s website following the call for about one week. The
transcription, recording and retransmission in any way of GOV’s
fourth quarter conference call are strictly prohibited without the
prior written consent of GOV.
Supplemental Data:
A copy of GOV’s Fourth Quarter 2014 Supplemental Operating and
Financial Data is available for download at GOV’s website,
www.govreit.com. GOV’s website is not incorporated as part of
this press release.
GOV is a real estate investment trust, or REIT, which primarily
owns properties located throughout the United States that are
majority leased to the U.S. Government and other government
tenants. GOV is headquartered in Newton, Massachusetts.
Please see the pages attached to this news release for a
more detailed statement of GOV’s operating results and financial
condition and for an explanation of GOV’s calculation of FFO,
Normalized FFO and NOI.
WARNING CONCERNING
FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD
LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO,
WHENEVER GOV USES WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”,
“INTEND”, “PLAN”, “ESTIMATE”, OR SIMILAR EXPRESSIONS, GOV IS MAKING
FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE
BASED UPON GOV’S PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT
FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND
MAY NOT OCCUR. GOV’S ACTUAL RESULTS MAY DIFFER MATERIALLY
FROM THOSE CONTAINED IN OR IMPLIED BY THESE FORWARD LOOKING
STATEMENTS AS A RESULT OF VARIOUS FACTORS. FOR EXAMPLE:
- GOV HAS ENTERED INTO AN AGREEMENT TO
SELL ONE PROPERTY LOCATED IN FALLS CHURCH, VA. THIS TRANSACTION IS
SUBJECT TO CERTAIN CONDITIONS, INCLUDING THE PURCHASER OBTAINING
CERTAIN ZONING ENTITLEMENTS FOR THIS PROPERTY, AND THESE CONDITIONS
MAY NOT BE MET. AS A RESULT, THIS TRANSACTION MAY NOT OCCUR, MAY BE
DELAYED OR ITS TERMS MAY CHANGE.
- CONTINUED AVAILABILITY OF BORROWINGS
UNDER GOV’S REVOLVING CREDIT FACILITY IS SUBJECT TO GOV SATISFYING
CERTAIN FINANCIAL COVENANTS AND MEETING OTHER CUSTOMARY CREDIT
FACILITY CONDITIONS.
- THE OPTION TO EXTEND THE MATURITY DATE
OF GOV’S REVOLVING CREDIT FACILITY IS SUBJECT TO GOV’S PAYMENT OF A
FEE AND MEETING CERTAIN OTHER CONDITIONS.
- ACTUAL COSTS UNDER GOV’S REVOLVING
CREDIT FACILITY OR OTHER FLOATING RATE FACILITIES WILL BE HIGHER
THAN LIBOR PLUS A PREMIUM BECAUSE OF OTHER FEES AND EXPENSES
ASSOCIATED WITH SUCH FACILITIES.
- THE ACTUAL PREMIUM OVER LIBOR PAID BY
GOV UNDER THE NEW FACILITIES WILL BE HIGHER OR LOWER THAN THOSE
STATED IN THIS PRESS RELEASE IF GOV’S CREDIT RATINGS CHANGE.
THE INFORMATION CONTAINED IN GOV’S FILINGS WITH THE SECURITIES
AND EXCHANGE COMMISSION, INCLUDING UNDER “RISK FACTORS” IN GOV’S
PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER
IMPORTANT FACTORS THAT COULD CAUSE GOV’S ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE IN ITS FORWARD LOOKING STATEMENTS. GOV’S
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION ARE AVAILABLE
ON ITS WEBSITE AT WWW.SEC.GOV.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON GOV’S FORWARD LOOKING
STATEMENTS.
EXCEPT AS REQUIRED BY LAW, GOV DOES NOT INTEND TO UPDATE OR
CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW
INFORMATION, FUTURE EVENTS OR OTHERWISE.
Government Properties Income
Trust
Consolidated Statements of
Income
(amounts in thousands, except per share
data)
(unaudited)
Three Months EndedDecember
31,
Year Ended December 31, 2014 2013
2014 2013 Rental income $
64,625 $ 58,271 $ 251,031 $ 226,910
Expenses: Real estate taxes 7,384 6,650 28,389 25,710
Utility expenses 4,297 4,052 19,369 17,116 Other operating expenses
12,396 11,845 45,982 41,134 Depreciation and amortization 17,339
14,739 66,593 55,699 Loss on asset impairment 400 — 2,016 —
Acquisition related costs 54 738 1,344 2,439 General and
administrative 4,272 3,361
15,809 12,710 Total expenses 46,142
41,385 179,502 154,808
Operating income 18,483 16,886 71,529 72,102 Interest
and other income 1 17 69 37 Interest expense (including net
amortization of debt premiums and discounts and deferred financing
fees of $384, $338, $1,310 and $1,340, respectively) (9,518 )
(4,443 ) (28,048 ) (16,831 ) Loss on early extinguishment of debt
(766 ) — (1,307 ) —
Income from continuing operations before income taxes and equity in
earnings of investees 8,200 12,460 42,243 55,308 Income tax benefit
(expense) 13 (83 ) (117 ) (133 ) Loss on issuance of shares by an
equity investee (14 ) — (53 ) — Equity in earnings of investees
6,032 115 10,963
334 Income from continuing operations 14,231 12,492 53,036
55,509 Income (loss) from discontinued operations (117 )
232 3,498 (889 ) Net income $
14,114 $ 12,724 $ 56,534 $ 54,620
Weighted average common shares outstanding (basic)
70,254 54,637 61,313
54,606 Weighted average common shares outstanding
(diluted) 70,343 54,722 61,399
54,685 Per common share amounts: Income
from continuing operations (basic) $ 0.20 $ 0.23 $ 0.87 $ 1.02
Income from continuing operations (diluted) $ 0.20 $ 0.23 $ 0.86 $
1.02 Income (loss) from discontinued operations (basic and diluted)
$ — $ — $ 0.06 $ (0.02 ) Net income (basic and diluted) $ 0.20 $
0.23 $ 0.92 $ 1.00
Government Properties Income
TrustFunds from Operations and Normalized Funds from
Operations(1)(amounts in thousands, except per share
data)(unaudited)
Three Months EndedDecember
31,
Year Ended December 31, 2014 2013
2014 2013 Calculation of Funds from
Operations (FFO) and Normalized FFO: Net income $ 14,114 $ 12,724 $
56,534 $ 54,620 Plus: depreciation and amortization from continuing
operations 17,339 14,739 66,593 55,699 Plus: depreciation and
amortization from discontinued operations — — — 1,025 Plus: loss on
asset impairment from continuing operations 400 — 2,016 — Plus:
loss on asset impairment from discontinued operations — — — 10,142
Plus: FFO attributable to SIR investment 13,447 — 24,677 — Less:
equity in earnings of SIR (6,004 ) — (10,876 ) — Less: increase in
carrying value of asset held for sale — — (2,344 ) — Less: net gain
on sale of properties from discontinued operations —
— (774 ) (8,168 ) FFO 39,296 27,463 135,826
113,318 Plus: acquisition related costs 54 738 1,344 2,439 Plus:
loss on early extinguishment of debt 766 — 1,307 — Plus: loss on
issuance of shares by an equity investee 14 — 53 — Plus: normalized
FFO attributable to SIR investment 14,024 — 26,898 — Less: FFO
attributable to SIR investment (13,447 ) —
(24,677 ) — Normalized FFO $ 40,707 $ 28,201 $
140,751 $ 115,757 Weighted average common
shares outstanding (basic) 70,254 54,637
61,313 54,606 Weighted average common
shares outstanding (diluted) 70,343 54,722
61,399 54,685 Basic and diluted
per common share amounts: FFO per common share (basic) $ 0.56 $
0.50 $ 2.22 $ 2.08 FFO per common share (diluted) $ 0.56 $ 0.50 $
2.21 $ 2.07 Normalized FFO per common share (basic) $ 0.58 $ 0.52 $
2.30 $ 2.12 Normalized FFO per common share (diluted) $ 0.58 $ 0.52
$ 2.29 $ 2.12
(1) GOV calculates FFO and Normalized FFO as shown above. FFO is
calculated on the basis defined by The National Association of Real
Estate Investment Trusts, or NAREIT, which is net income,
calculated in accordance with GAAP, plus real estate depreciation
and amortization and the difference between FFO attributable to
GOV’s equity investment in SIR and GOV’s equity in earnings of SIR
but excluding impairment charges on real estate assets, carrying
value adjustments of real estate assets held for sale, any gain or
loss on sale of properties, as well as certain other adjustments
currently not applicable to GOV. GOV's calculation of Normalized
FFO differs from NAREIT's definition of FFO because GOV includes
the difference between FFO and Normalized FFO attributable to GOV’s
equity investment in SIR, includes business management incentive
fees, if any, only in the fourth quarter versus the quarter they
are recognized as expense in accordance with GAAP and excludes
acquisition related costs, loss on early extinguishment of debt and
loss on issuance of shares by an equity investee. GOV considers FFO
and Normalized FFO to be appropriate measures of operating
performance for a REIT, along with net income, operating income and
cash flow from operating activities. GOV believes that FFO and
Normalized FFO provide useful information to investors because by
excluding the effects of certain historical amounts, such as
depreciation expense, FFO and Normalized FFO may facilitate a
comparison of GOV's operating performance between periods and with
other REITs. FFO and Normalized FFO are among the factors
considered by GOV's Board of Trustees when determining the amount
of distributions to its shareholders. Other factors include, but
are not limited to, requirements to maintain GOV's status as a
REIT, limitations in GOV’s credit agreement and public debt
covenants, the availability of debt and equity capital, GOV's
expectation of its future capital requirements and operating
performance, GOV’s receipt of distributions from SIR and GOV’S
expected needs and availability of cash to pay its obligations. FFO
and Normalized FFO do not represent cash generated by operating
activities in accordance with GAAP and should not be considered as
alternatives to net income, operating income or cash flow from
operating activities, determined in accordance with GAAP, or as
indicators of GOV's financial performance or liquidity, nor are
these measures necessarily indicative of sufficient cash flow to
fund all of GOV's needs. These measures should be considered in
conjunction with net income, operating income and cash flow from
operating activities as presented in GOV's Consolidated Statements
of Income and Comprehensive Income and Consolidated Statements of
Cash Flows. Other REITs and real estate companies may calculate FFO
and Normalized FFO differently than GOV does.
Government Properties Income
Trust
Calculation and Reconciliation of
Property Net Operating Income (NOI) and Cash Basis
NOI(1)
(amounts in thousands)
(unaudited)
Three Months EndedDecember
31,
Year Ended December 31, 2014 2013
2014 2013 Calculation of NOI
and Cash Basis NOI(2): Rental income $ 64,625 $
58,271 $ 251,031 $ 226,910 Operating expenses (24,077 )
(22,547 ) (93,740 ) (83,960 ) Property net
operating income (NOI) 40,548 35,724 157,291 142,950 Non-cash
straight line rent adjustments included in rental income (1,123 )
(787 ) (4,501 ) (2,739 ) Lease value amortization included in
rental income 238 223 868
1,123 Cash Basis NOI $ 39,663 $ 35,160
$ 153,658 $ 141,334
Reconciliation of NOI
and Cash Basis NOI to Net Income: Cash Basis NOI $ 39,663 $
35,160 $ 153,658 $ 141,334 Non-cash straight line rent adjustments
included in rental income 1,123 787 4,501 2,739 Lease value
amortization included in rental income (238 ) (223 )
(868 ) (1,123 ) NOI 40,548 35,724 157,291 142,950
Depreciation and amortization (17,339 ) (14,739 ) (66,593 ) (55,699
) Loss on asset impairment (400 ) — (2,016 ) — Acquisition related
costs (54 ) (738 ) (1,344 ) (2,439 ) General and administrative
(4,272 ) (3,361 ) (15,809 ) (12,710 )
Operating income 18,483 16,886 71,529 72,102 Interest and other
income 1 17 69 37 Interest expense (9,518 ) (4,443 ) (28,048 )
(16,831 ) Loss on early extinguishment of debt (766 ) — (1,307 ) —
Income tax benefit (expense) 13 (83 ) (117 ) (133 ) Loss on
issuance of shares by an equity investee (14 ) — (53 ) — Equity in
earnings of investees 6,032 115
10,963 334 Income from continuing operations
14,231 12,492 53,036 55,509 Income (loss) from discontinued
operations (117 ) 232 3,498
(889 ) Net income $ 14,114 $ 12,724 $ 56,534
$ 54,620
(1) GOV calculates NOI on a GAAP and cash basis as shown above.
GOV defines NOI as income from our rental of real estate less our
property operating expenses. NOI excludes amortization of
capitalized tenant improvement costs and leasing commissions. GOV
defines Cash Basis NOI as NOI excluding non-cash straight line rent
adjustments and lease value amortization. GOV considers NOI and
Cash Basis NOI to be appropriate supplemental measures to net
income because they may help both investors and management to
understand the operations of our properties. GOV uses NOI and Cash
Basis NOI to evaluate individual and company wide property level
performance, and GOV believes that NOI and Cash Basis NOI provide
useful information to investors regarding our results of operations
because they reflect only those income and expense items that are
incurred at the property level and may facilitate comparisons of
GOV’s operating performance between periods and with other REITs.
The calculations of NOI and Cash Basis NOI exclude certain
components of net income in order to provide results that are more
closely related to our properties' results of operations. NOI and
Cash Basis NOI do not represent cash generated by operating
activities in accordance with GAAP and should not be considered as
alternatives to net income, operating income or cash flow from
operating activities, determined in accordance with GAAP, or as
indicators of our financial performance or liquidity, nor are these
measures necessarily indicative of sufficient cash flow to fund all
of our needs. These measures should be considered in conjunction
with net income, operating income and cash flow from operating
activities as presented in GOV’s Consolidated Statements of Income
and Comprehensive Income and Consolidated Statements of Cash Flows.
Other REITs and real estate companies may calculate NOI and Cash
Basis NOI differently than GOV does.
(2) Excludes properties classified as discontinued
operations.
Government Properties Income
Trust
Consolidated Balance Sheets
(amounts in thousands, except share
data)
(unaudited)
As of December 31,
2014 2013 ASSETS Real estate properties: Land $
254,008 $ 243,686 Buildings and improvements 1,428,472
1,324,876 Total real estate properties, gross 1,682,480
1,568,562 Accumulated depreciation (219,791)
(187,635) Total real estate properties, net 1,462,689 1,380,927
Equity investment in Select Income REIT 680,137 — Assets of
discontinued operations 13,165 25,997 Assets of property held for
sale 32,797 — Acquired real estate leases, net 150,080 142,266 Cash
and cash equivalents 13,791 7,663 Restricted cash 2,280 1,689 Rents
receivable, net 36,239 33,350 Deferred leasing costs, net 11,450
11,618 Deferred financing costs, net 12,782 3,911 Other assets, net
12,205 25,031 Total assets $ 2,427,615 $ 1,632,452
LIABILITIES AND SHAREHOLDERS’ EQUITY Unsecured revolving
credit facility $ — $ 157,000 Unsecured term loans 550,000 350,000
Unsecured senior notes, net of discount 347,423 — Mortgage notes
payable, including premiums 187,694 90,727 Liabilities of
discontinued operations 150 276 Liabilities of property held for
sale 343 — Accounts payable and accrued expenses 26,471 23,216 Due
to related persons 2,161 2,474 Assumed real estate lease
obligations, net 15,924 19,084 Total liabilities
1,130,166 642,777 Commitments and
contingencies Shareholders’ equity: Common shares of
beneficial interest, $.01 par value: 100,000,000 and 70,000,000
shares authorized, respectively, 70,349,227 and 54,722,018 shares
issued and outstanding, respectively 703 547 Additional paid in
capital 1,457,631 1,105,679 Cumulative net income 248,447 191,913
Cumulative other comprehensive income 37 49 Cumulative common
distributions (409,369) (308,513) Total shareholders’
equity 1,297,449 989,675 Total liabilities and
shareholders’ equity $ 2,427,615 $ 1,632,452
Government Properties Income TrustJason Fredette,
617-219-1440Director, Investor Relations
Government Properties Income (NASDAQ:GOV)
過去 株価チャート
から 6 2024 まで 7 2024
Government Properties Income (NASDAQ:GOV)
過去 株価チャート
から 7 2023 まで 7 2024